Insurance Regulatory Development Authority has released its Annual report for 2013-2014 on 8th January,2015. Based on the annual report I had listed down the best Life Insurance companies. The criteria for the selection is CLAIM SETTLEMENT RATIO 2013-14.
What is Claim Settlement Ratio in Insurance?
Claim settlement is one of the most important services that an insurance company can provide to its customers. Insurance companies have an obligation to settle claims promptly. For instance, if a life insurance company receives 1000 death claims and settles 980, the claim settlement ratio of that company would be 98%.
Best Life Insurance Companies based on Latest Claim Settlement Ratio 2013-14
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How to read IRDA Claim Settlement Ratio Table?
Let me explain on how to understand the numbers given in the above table. Let us consider Sl.No 1 which has data regarding LIC. During the period 2013-14 the total number of claims (no of policies) received by LIC of India are 7,60,344. This is inclusive Last period’s pending claims and this period’s (2013-14) claims that are booked or intimated.
7,46,212 no of policies out of total 7,60,344 policies were settled during the period 2013-14. This translates into a claim settlement ratio of 98.14% for LIC.
The total claimed amount (Benefit Amount) on LIC policies during 2013-14 was Rs 8,905 crore. Out of which Rs 8,475 crore worth claims are settled.
What is Claims repudiated, Claims Pending & Claims Written Back:
As per the above explanation LIC gets 98.14/100. So, what happened to 1.86% (100-98.14%)of claims (no of policies)?
These claims fall under the category of claims repudiated or pending or written back. (Repudiated means Claim rejected. Pending are yet to be settled and Written back claims are ‘sent back for more information’).
Important Points to ponder upon:
- LIC of India, ICICI Prudential Life and HDFC Life are the top Life Insurance companies in terms of best Claim Settlement Ratio (2013-14)
- DLF Pramerica and Edelweiss Tokio Life Insurance companies have higher number of Repudiated Claims
- LIC, ICICI and HDFC were the toppers in 2012-13 also.
- The claims settlement ratio does not talk about the type of policies i.e., whether the claims that were received are Term or endowment or money back plans.
- New Life Insurance Companies will generally have Low Claim Settlement Ratios
- As per IRDAI’s annual report the industry’s settlement ratio had slightly increased to 96.75% in 2013-14 from 96.41% in 2012-13 and the repudiation ratio had remained almost at the same level of 2.08% in 2013-14 as in 2012-13 (2.10%).
- Before buying any type of plan, do look at the company’s Claim Settlement Ratio
- Do not hide any facts while filling the proposal form. This will ensure that your claim (after the unfortunate event)is settled.
- Though Claim Settlement record is one of the important factors while choosing your life insurance plan, it is advisable to go for only Term Insurance. You can opt for a Term plan based on the claim settlement record. The other deciding factors can be cost of premium, features, optional riders, quality of service and your comfort level with the Brand.
Most companies cite incomplete documentation or concealment of facts as a reason for rejecting claims. Hence, while buying a life insurance it is of utmost importance that you furnish accurate information and ensure that all paper work is into place. Give importance to claim settlements record and do not get swayed away by higher returns / tax benefits alone.
( Image courtesy of David Castillo Dominici at FreeDigitalPhotos.net)
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in which page of IRDA annual report we will get the CSR?
Dear SS Rao ..It’s page no 127 & 128 (pdf file). Title of the table is ‘ Individual Death claims for the year 2014-15 ‘.
Please provide 2015 e term claim settlement ratio ??
Dear Mr Gupta..Unfortunately IRDA’s report do not provide claims data based on the type of insurance product.
Kindly read : Latest Claims data of LI companies 2014-15.
Hi,
Can you please check my understanding on below points and explain the last one?
#1 We will pay the Death Benefit (the Sum Assured chosen by you) to your nominee, on the first occurrence of either:
Death of the Life Assured, or
My understanding is Natural Death or any type of death- correct?
#2 Diagnosis of Terminal Illness
My understanding is disease like cancer which can not be cured – is this correct?
#3 On diagnosis of Permanent Disability due to an accident, the future premiums under your policy for all benefits are waived.
I didn’t understand this? can you pls exlain.
Thanks
Dear Ankur,
Suggest you to read this article and you may revert to me if you need more info: Personal Accident Insurance Plan & What is permanent disability?
Also, you may have to go through the policy wording document to understand clearly as to what is considered as ‘terminal illness’ & ‘what is considered as permanent disability’.
Hi….
My name is mayur n m teacher in private school n my whole family depend on me so which plan i should for better future…..
I m confused for term plan n policy plans…….
So pls suggest me better idea
Dear Mayyur,
Kindly buy a term plan at the earliest. Read below articles and you may revert to me if you need any more details;
Best Term life insurance plan in India.
Financial Planning Pyramid.
Term insurance (or) Traditional life insurance plan, which one is the best?
Why having adequate INSURANCE coverage is important?
Thanks sir……i hve search about it n its very useful…….
In these few days the interest rate of small saving schemes is decreased so now a days which will be best option….. To saving money for future
Dear Mayyur..Kindly let me know your time-frame or financial goals.
Meanwhile you may read this article : List of best investment options in India.
Dear Sir,
what is the process of e term plan settlement? if someone who opt online term plan and unfortunately he/she dies.then what is the process?
Dear Pravin,
Nominee has to intimate about the claim to life insurance company with all the documents as mentioned in the policy document.
Irrespective of the type of life insurance products, below documents can be the basic requirement to be accompanied for any claim case:-
Claims Form
Death certificate issued by the Municipal Corporation(in case of death claim)
Original Policy Document
Beneficiary’s Residence & Identity Proof (Original seen & verified stamp along with signature to be affixed on 100% cases)
Advance Discharge Voucher
NEFT Mandate along with Account Proof..
a) Cause of Death –Accidental/Murder/Suicide
Police records viz. First investigation report, panchnama, inquest report and final investigation report to be attested by police authorities
Post Mortem & Viscera report attested by police authorities.
b) Cause of Death –Natural
A copy of medical records at the time of death.
A copy of medical records for past illness/ailments
Doctor’s /Hospital’s certificate attested by appropriate authorities
Family Doctor’s certificate attested by appropriate authorities
Employer’s certificate attested by appropriate authorities
2) If there are any requirements raised by your LI company for checking the admissibility or otherwise of the claim, the same needs to be addressed by the Claimant (nominee).
I had new India insurance individual health plan 150000 for each. Included 4 family members. Since last 5year. Father age 58 Mom 53
Is it possible convert individual to floater plan around 5 lakhs and also without health check up
Dear Prashant,
You can convert but suggest you not to include parents in the family floater plan. Let them have independent mediclaim covers.
Kindly read :
Best Family floater plans.
Best portals to compare health insurance plans.
What’s your opinion about exide life insurance company in terms of service and claim settlement
Dear Nagabhushan,
It is a new company, we have to wait for few more years to get clear picture about claim settlement ratio. But as long as you disclose the required information in the proposal form honestly, it really does not matter though.
Kindly read : Best Term insurance plans.